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Volume 11 - Opinions of Counsel SBRPS No. 105

Opinions of Counsel index

Agricultural exemption (conversion) (gravel mining) - Agriculture and Markets Law, §§ 305, 306; Real Property Tax Law, § 481:

Agricultural land receiving an agricultural assessment, which is disturbed by gravel mining, will not be subject to a conversion payment provided such land is restored and ready for a resumption of farming by the next taxable status date following such mining. If such restoration does not take place by that date, conversion payments will be owed.

We have received an inquiry concerning the agricultural assessment program (Agriculture and Markets Law [AML], Article 25 AA; Real Property Tax Law, §481). The assessor states that, during the summer of 2007, a farmer is planning to begin mining gravel on a “very hilly” portion of his land that previously received an agricultural assessment. The main intent of the mining is to level the land, and after the mining is completed, the top soil is to be replaced and the land again used for crop production. {1}  The question is whether a conversion payment will be owed as a consequence of this activity (AML, §§305(1)(d), 306(2)).

AML, section 301(8), defines a “conversion” as “an outward or affirmative act changing the use of agricultural land and shall not mean the nonuse or idling of such land.” A court has construed this provision to apply only when land that previously received an agricultural assessment may “no longer be used for agricultural production” as a result of such an affirmative alteration (Pezzo v. Mazzetti, 202 A.D.2d 935, 937, 609 N.Y.S.2d 699, 701 (3d Dept., 1994)).

AML, section 305(1)(d)(iv), provides that such payments are not due when former agricultural land that benefited from an agricultural assessment is converted “by virtue of oil, gas or wind exploration, development, or extraction activity....” {2}  By its terms, this provision does not apply when former agricultural land is no longer suitable for farming as a result of gravel mining. Consequently, gravel mining of land which previously received an agricultural assessment generally would appear to constitute a conversion for which payments are owed.

It appears, however, from the facts presented here that the proposed gravel mining is intended to facilitate, not prevent, near term commercial farming of the affected land. Accordingly, in our opinion, the land disturbed by the gravel mining will not be subject to a conversion payment provided such land is restored and ready for a resumption of farming by no later than the town’s 2008 taxable status date. If such restoration does not take place by that date, our opinion would be otherwise.

May 9, 2007


{1}  The landowner has requested that the affected land not receive an agricultural assessment on the 2007 assessment roll.

{2}  The Sponsor’s Memorandum for L.1982, c.564, which originally amended AML, section 305(1)(d), to add the exemption to liability for conversion payments when agricultural land is not available for farming as a result of oil or gas exploration, development or extraction, states that chapter 564 “is consistent with overall state policy to encourage the development of its oil and gas resources” (1982 New York State Legislative Annual 192). We are unaware of any similar State policy for promoting gravel mining on agricultural land.

Updated: